There is talk of an ‘OTT crisis’ coming after Corona 19 is over. At the ‘Post-Corona OTT and K-Content Development Plan’ forum hosted by the Ministry of Culture, Sports and Tourism and the Korea Creative Content Agency on the 29th at CKL Stage in Gwanghwamun, Seoul, the current OTT platform We discussed with the producer what measures are necessary.
Lim Seok-bong, head of JTBC’s media policy department, saw that OTTs “beneficiaries” due to COVID-19. During the global pandemic in 2020, Netflix surpassed 200 million subscribers. This is an increase of 37 million paid subscribers compared to 2019. In the fourth quarter of 2021, the number of Netflix subscribers will reach 221.85 million.
However, starting in the first quarter of 2022, the situation will change immediately. It is partly because 700,000 Russian subscribers fell due to the Russian war, but because the Corona situation has eased and people are no longer watching OTT in their room, but enjoying outdoor activities. Intense competition from other OTT platforms also reduced the number of Netflix subscribers, Lim pointed out.
[관련기사: OTT 주춤하고 팝콘 풀린 극장가는 활기]
OTTs such as Netflix, Disney+, HBO MAX, Paramount and Teabing, Wave, Watcha, and Coupang Play are overflowing. In the overflowing competition of OTTs, the most important thing is ‘IP’ (intellectual property rights).
Sungmin Lee is a professor at Korea National Open University. “The era of OTT is IP”In the end, what makes people subscribe to OTT is a battle of what kind of content, that is, IP. Professor Lee pointed out that the concept of IP is a concept different from simple content and has the potential of infinite expansion. life ‘Content Franchise Strategy’For example, when a piece of content becomes popular, it subdivides and re-creates the story, turns it into a series, and transforms it into other content formats such as webtoons, web novels, and movies. In the end, it means that IP makes a fandom, and it is important for OTTs to collect and manage IP well instead of focusing on creating ‘new content’.
In the general discussion at the end of the promotion forum, Go Joong-seok, CEO of Eggs Coming, Lee Min-seok, CEO of Yinat Media, Kim Tak-hoon, Chung-Ang University Professor and Taktoon Enterprise CEO, Ko Chang-nam Teabing Director, and Kim Yo-han, Director of Watcha, shared the difficulties they experienced while experiencing the OTT business.
Production company side “OTT platform, does it share profits fairly with producers?”
Koh Jung-seok, CEO of Eggs Coming, said, “We thought about performances to expand the IP of ‘The Wise Doctor Life’, but there were a lot of practical problems such as discussions with the actors’ agencies. We have to make another investment,” he said. As Professor Seong-Min Lee said, ‘Securing IP’ is very important, but it is difficult to implement as an actual operator. Eggs Coming is a production company that creates content centered on producer Na Young-seok, producer Shin Won-ho, and writer Woo-jeong Lee.
There are also opinions that it is difficult for content creators to secure IP, and in particular, copyrights are sometimes given when supplying to a platform, making it even more difficult for producers. Tak-hoon Kim, a professor at Chung-Ang University and CEO of Tak-Tun Enterprise, posed questions to the OTT representatives directly during the discussion.
CEO Kim “When a movie is a jackpot, the producer and the investor share the profits. But when OTT content hits a jackpot, does the platform share profits with the producer?”asked. Yohan Kim, Director of Watcha, who was sitting next to him, said, “The contract terms with the producers are different for each OTT and the contracts for each content are different. Sometimes it is distributed.” The conditions are different for each content entry.
CEO Kim said, “As Director Kim said, there are cases where it is reasonable for OTT platforms and producers to distribute profits, but there are many cases where this is not the case. The problem was raised that the producers could not get any more profits. If this structure continues, it will become difficult for production companies to have IP,” he pointed out.
[관련 기사: 세계 최고 흥행 ‘오징어게임’ 넷플릭스 수익 논쟁 커지나]
CEO Kim said, “The role of the Content Promotion Agency or the Ministry of Culture, Sports and Tourism is needed to address these issues.
domestic platform
“Netflix takes over the rights of producers with capital… The platform should be diverse.”
Go Chang-nam, director of Teabing, and Kim Yo-han, director of Watcha, explained the position of platform operators. Director Ko Chang-nam of Teabing said, “Most of the points pointed out in the aspect of coexistence between the OTT platform and producers are related to Netflix. Netflix owns IP related to copyright. Of course, it is true that they pay that much money. So in the end, for content to gain power, there must be a lot of platforms.”
In the end, it is argued that Netflix invests a large amount of money so that content producers can produce content with the power of capital and buys copyrights in return. If this trend continues, coexistence with production companies will be difficult.
Director Ko Chang-nam of Teabing said, “In order for OTT to develop and coexist with contents, there must be various OTTs. I hope that related promotion policies will also be supported quickly.” He said, “They say they are setting up a development fund that produces content, but recently there are many works that cost 20 billion won to one side of content, but if the fund is about 40 billion won, it is not enough. A content fund worth 1 trillion won should come out,” he said.
If ‘cost-effectiveness’ is subtracted from K-content, will Netflix still invest?
Yohan Kim, Director of Watcha also said, “Netflix pays a lot of money to producers, invests in production, and takes almost all of the rights. Domestic OTTs pay less, but copyright negotiations are possible.” The producers have no choice but to prefer Netflix, which pays a lot of money, but in the long run, it may move in the direction of acquiring IP.
Director Kim insisted that Netflix currently invests a lot of money in Korean content with good ‘cost-effectiveness’, but this ‘investment’ can change at any time.
Director Kim Yo-han “Of course, for now, Netflix will continue to invest heavily in Korean content. For example, Hollywood works cost more than 100 billion won, but Korea uses tens of billions to create content like ‘squid game’. It is a place to create ‘good content’. However, there is no guarantee that this will continue. After that, if popping content such as ‘Squid Game’ comes out in Vietnam and Thailand, and if they are made with more cost-effective production costs, Netflix’s investment destination will change.”predicted that
Director Kim said, “Right now, Netflix makes a big investment in Korea, but the investment may shrink afterward. In the end, it is argued that there must be various OTTs to prevent Netflix’s ‘solo’ and win-win with production companies.
Kang Ji-eun, head of the broadcasting and video department of the Ministry of Culture, Sports and Tourism, said, “Korea has high overall production competitiveness and has good so-called ‘cost-effectiveness’. For this reason, many platforms are significantly expanding investment in Korean content as the focus of their entry into Asia. We need to go beyond vision and go to a structure where we can coexist together.”
Manager Kang said, “We are reviewing various support policies such as a production cost support fund, a production support project on the premise of sharing IP with the production company, support for additional businesses, and tax support, etc. I will,” he said.
“It is necessary to strategically support content planning or commercialization of the IP sector,” said Song Jin, head of the Korea Creative Content Agency. .
“Recently, a bill was passed in Switzerland requiring global OTTs to purchase or invest in Swiss-produced videos with a portion of the profits earned in Switzerland, which has a lot of implications.” We are discussing measures such as the right to claim additional compensation, a ban on the comprehensive transfer of copyrights, and the introduction of a re-screening distribution. We will set up a reasonable way to retain copyright between the content and the platform, or set the retention period, and prepare a structure so that they can coexist with each other.”